Tesla Motors Inc (TSLA) To Repair RAV4 EV Component After Toyota Motor Corp (ADR) (TM)’s Recall

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Tesla Motors Inc (NASDAQ:TSLA) indicated that it would repair RAV4 EV component following the decision of Toyota Motor Corp (ADR) (NYSE:TM) to recall approximately 2,500 electric vehicles, according to a report. The Japanese auto-maker built those cars over a period of three years. The issue is probably related with the software.

Components

Tesla Motors Inc (NASDAQ:TSLA) was the supplier of the components. Therefore, it wanted to rectify the issue. It was reported that a software error in the propulsion system of RAV4 EV resulted in the vehicle shifting to neutral. This might have led to a total loss of driving power thus boosting the risk of a crash, Toyota Motor Corp (ADR) (NYSE:TM) said in a posting in its website in the United States.

A spokesperson for Toyota Motor said that its dealers would repair for the component supplied by Tesla. Toyota has recalled about 112,500 vehicles, which included RAV4 EV. However, Toyota has not disclosed anything about the cost involved in the recalls or the supplier relations.

Last year, both Toyota Motor Corp (ADR) (NYSE:TM) and Tesla Motors Inc (NASDAQ:TSLA) ended the RAV4 EV program. Both the companies started pursuing different ways to make zero emission cars.

Separate Path

Toyota has started assembling its Mirai fuel-cell vehicle, which was powered by hydrogen, in December in Japan. On the other hand, Tesla was preparing the summer launch of its Model X SUV along with its sedan Model S cars.

In October last year, Toyota indicated that it started cutting down its stake in Tesla Motor. However, the company refused to disclose the details about the timing of the sale or the size of it. At the end of March 2014, Toyota was holding 2.94 million shares of Tesla Motors.

Following the divorce between the two companies, Toyota Motor Corp (ADR) (NYSE:TM) and Tesla Motors Inc (NASDAQ:TSLA) started taking potshots at each other.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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